The Stock Market Does Especially Poorly
in September When A Republican Is President:A New Look at Market
Behavior in Septembers
and Octobers: 1915-2006
or
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People
have asked me to write a Daily Blog.
They seem to want me to give them a thought
or two each day. About what? Well,
we'll just
have to wait and see. As, I see it, a blog is a
personal statement. I will try to make it enter-
taining and relate it mostly to the stock market.

I do promise not to belabor the
obvious. So,
I hope these thoughts, reflections and finds are
worth your time. I will give you my best.

Most
of us know that Septembers are historically the poorest performing month
and
Octobers often bring a climactic bottom. The Tiger programs show the
probability
of
a DJI rise from any date you enter, based on the period 1965-2005. When I
enter 8/31
it
advises me that the DJI is up only 30.8% of the time over the following month and the
DJI
falls .8% on average.

I
first saw these statistics in Arthur Merrill's Behavior of Prices on Wall
Street. This seasonality is true elsewhere, not just in America.
So,
the September decline does not stem from the high cost of American college tuitions!
In
the UK, for example, the "FTSE 100 drops an average of 1.37% during September, making
it
the month that sees the worst market performance of the year. The research showed that the
FTSE
100 has posted negative returns in 14 of the last 22 Septembers. The study found
that
the
much-maligned October has recorded an average index drop of just 0.25% over the
same
period...June is the second-worst performer, according to ADVFN, losing an average
of
0.75% each year, while December is the best month for the FTSE 100 with the index
climbing
an average of 2.03%" .
(
Source: http://www.growingbusiness.co.uk/September_worst_month_for_stock_market.YeISIT1op7A9-A.html
)

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Stocks Do Especially Poorly in September When A Republican Is President:A New Look at Market Behavior in
Septembers and Octobers: 1915-2006

A Partisan Look at Fall Seasonality: 1915-2007

One of Wall Street's dirty little
secrets is that Septembers and Octobers are particularly
dangerous when a Republican is President. This begs the question why no one has ever looked
at the
data this way. But I'll leave that subject for another day.

I have
often heard that September is month when the market declines much more often than
it rallies. And that Octobers often bring a conclusion to bear markets
and bearish corrections.

The study here
of DJI statistics and charts from 1915 to 2006 shows that it is very important for
investors and traders to make note of whether it's a Democrat or a Republican
holds the Presidency.
My study here shows the history of the DJI in Septembers and Octobers since 1915.
As we approach
this FALL period, the study may help you. I hope so.

Here's the
biggest surprise. When a Democrat was President, the
DJI rose in 26 Septembers
and fell in 20. But when a Republican was in office, the DJI rose in
only 18 Septembers and fell in
28. With a Republican President, for the whole
September-October period the DJI gained in 26 cases
and fell in 20 instances. An October bottom is a somewhat common

How did the market do in the 7th year of a President's term? With a Democrat in the White House
it rose in all 3 Septmbers and in all 3 Octobers. With a Republican in office, it fell in all 3 Septemberss.
With a Republican in office, it fell in all 3 Septembers and in two of the three Octobers. Things do not
look good for next month. (Our Peerless Stock Market Timing system gave a near-perfect major
Sell on July 17th with the DJI-30 tagging 14,000. Today it fell 200 points and is probably going lower.)
.
September and October in the 7th Year of The Same President's Term
(Prices shown below are those for the DJJI-30)

End of Aug, End of Sept. End of October
--------- ------- --------------
Wilson (Dem) 1919 104.80 111.40 118.90
Up all year but 12% decline July to August and 13% decline Oct-December.
--------------------------------------------------------------------------
Hoover (Rep) 1931 139.40 96.60 100.70
Year-long bear market
--------------------------------------------------------------------------
FDR (Rep) 1939 134.40 150.20 151.98
DRally late August to September.
--------------------------------------------------------------------------
Truman (Dem) 1951 270.30 271.20 262.40
September peak. 8% decline to November,
-------------------------------------------------------------------------
Eisenhower(Rep) 1959 674.90 664.40 631.70
July peak, head and shoulders, September bottom and steady recovery.
-------------------------------------------------------------------------
Reagan (Rep) 1987 2662.95 2596.28 1993.53
Republican up until August peak. October was 40% lower.
-------------------------------------------------------------------------
GBush (Rep) 2003
Septembers and Octobers Behave Very Differently
When A Democrat Is President from When A Republican Is President
in the Third Year of a Four-Year Presidential termWhen A Democrat Was President The DJI Rises 67% of Septembers
and 67% of Octobers between 1965 and 2006.

When a Democrat was President, in the third year of the 4-year Presidential
cycle, Septembers produced a DJI rally in 8 cases and a decline in 4 years. Octobers
show the same ratio, 8 up and 4 down. Over the two month period, there were
9 years when there were gains and 3 years when there were declines in the
third year of a Democrat's Presidential 4-year cycle.

===============================================================
When A Republican Was President, The DJI Falls 64% of September
and 73% of Octobers from 1915 to 2006.

When a Republican was President, in the third year of the 4-year Presidential
cycle, Septembers produced a DJI rally in 4 cases and a declline in 7. Octobers
show only 3 up but produced 8 down-months. Over the two month period, there were
5 years when there were gains and 6 years when there were declines in the
third year of a Republican's Presidential 4-year cycle. Republican as President and 3rd Year of 4-Year Presdential Cycle

Full History of DJI in Septembers and Octobers, 1915-2006
DJI-30 DJI-30 DJI-30
August September October
Close Close Close
1915 81.20 + 90.60 + 95.30 Democrat up all year except for 18% decline from April to May.
1916 92.30 103.70 104.60 Democrat 10% decline March-July and 18% decline Nov-December.

1917 83.40 83.50 75.50 Democrat 30% decline from May to December.
1918 82.50 84.70 84.10 Democrat Up all year until October-December 10% decline.
1919 104.80 +111.40 + 118.90 Democrat Up all year but 12% decline July to August and 13% decline Oct-December.
1920 86.40 84.50 85.00 Democrat Down all year

1965 893.10 932.40 959.10 Democrat year long rally. 10% correction from march to June.
1966 788.41 774.22 807.10 Democrat year long decline ends in OCtober.
1967 904.24 -901.29 +926.66 Democrat rally until S12 peak in Sept. 10% decline to Nov. bottom.
1968 896.01 935.79 952.39 Democrat 10% decline until March and then up for rest of year.

1969 836.20 813.90 855.99 Republican year long decline.
1970 734.73 764.58 750.68 Republican decline to a May bottom, then up.
1971 858.43 +898.87 -887.19 Republican Up until April, Down until November and then up.
1972 924.74 963.73 953.27 Republican up slightly all year.

1973 926.40 890.16 947.10 Republican Down until August, up until Oct and then down.
1974 678.58 607.80 665.52 Republican Down all year.
1975 835.34 -793.88 +936.04 Republican up until July peak.
1976 904.64 968.92 990.15 Republican September peak and 10% decline to November bottom.

1977 861.49 847.11 818.35 Democrat year long decline with temporary October bottom.
1978 880.72 865.82 792.45 Democrat up until early September and then 14% decline with Npov. bottom.
1979 887.63 -878.58 -815.70 Democrat Up until September and then 12% decline in October.
1980 932.59 932.42 924.49 Democrat Down until march, then up until November. Then 10% decline and up.